Monday, March 8, 2010

Claudia Chamorro, a licensed social worker, lost her long-standing job with a local NGO 8 months ago. She lives in Managua with her parents, three siblings and four children. Claudia’s two other sisters and a brother migrated to San Francisco, in search of work in what her sister deems “the land of opportunities, where if people don’t study, it’s simply because they don’t want to.” For years, these siblings have sent back $50 or $100 monthly from the U.S., which the family relies on heavily to meet their basic needs.

In recent months, however, these remittances have all but disappeared. Both her brother and sister received sharp cuts in their working hours at a restaurant in the Bay Area and were unable to send anything for seven months until, finally, $50 arrived in January. Unable to find work and without the much-needed remittances, Claudia is finding herself considering the worst option imaginable to her: making the trip to the U.S. herself.

In the midst of this economic crisis, Claudia and many others like her are stashing away fifty cents here, a dollar there, to purchase a chance at survival – a refrigerator on wheels, a set of juggling balls, or a bus ticket to Costa Rica. As more jobs are lost each month in the deflated global economy and foreign-owned textile factories or maquilas steadily close, countless people have but two options. They can turn to the informal market, selling cold homemade juices from a mobile refrigerator or juggling in the streets, or they can leave their country in search of work in the stronger economies of Costa Rica, Spain, or the U.S. In spite of increasing stories about the difficulties of migrating abroad, more and more Nicaraguans are considering migration their only hope for sustaining their families and their homes.

Meanwhile, those migrants already working abroad, including Claudia’s three siblings, have felt the blow of the economic crisis with unique force. Many living in the U.S. or nearby Costa Rica have either lost their jobs or experienced a serious cut in hours and/or wages. For their families back home in Nicaragua, this loss is tremendous. In 2008, money sent home by migrants made up approximately 13% of Nicaragua’s GDP, a total of $818 million. As these remittances dwindle or disappear, migrants’ families often lose their main source of income.

Claudia's family and the difficult choices they face illustrate the vast interconnectedness of the Nicaraguan and the U.S. economies. Within the economic structure imposed by DR-CAFTA (Dominican Republic -Central American Free Trade Agreement), the U.S. economy functions as the heart pumping blood through Nicaragua’s veins. When the U.S. heartbeat slows or stops, the repercussions are felt acutely in Nicaragua. Decreased demand in the U.S. for key Nicaragua exports causes increasing unemployment in Nicaragua, where many find work in free trade zones or export-based agriculture. The economic slow-down in the U.S. also means fewer jobs for migrants living abroad, and therefore a gradual loss of another vital lifeline – the precious remittances sent from afar.

Such heavy dependence on remittances points to an inherently unsustainable economic model, propagated by DR-CAFTA, wherein a country relies on the stability of a foreign market for survival. Furthermore, research shows that in Nicaragua remittances are spent primarily on meeting basic needs. Little is “caught” by the Nicaragua economy and invested in ways that contribute to long-term growth, stability, and relative sustainability. Remittances are only a temporary fix in the struggle against cyclical poverty, punctuated by a dependency on a foreign market.

Since there is little to no protection in free trade agreements such as DR- CAFTA to mitigate the disastrous impact of these agreements on the poor, Nicaraguans feel each financial blow with a new freshness, seeing fewer and fewer options for survival. For many, picking up a juggling ball or mounting a bus to San José remain the only options in sight.

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